(Reuters) – U.S. energy companies this week added oil and gas rigs for the second week in a row as crude prices hit their highest level since 2018, prompting some drillers to return to the well.
The number of oil and gas rigs, an early indicator of future production, rose from nine to 470 in the week to June 18, its highest level since April 2020, the energy services company said on Friday. Baker Hughes Co in his closely watched report.
The total number of platforms increased by 204 platforms, or 77%, compared to the same period last year. It has also increased 93% since falling to a record high of 244 in August 2020, according to data from Baker Hughes dating back to 1940.
U.S. oil rigs rose eight to 373 this week, their highest level since April 2020, while gas rigs rose one to 97, their first increase in six weeks, according to Baker Hughes.
U.S. crude futures were trading below $ 72 a barrel on Friday, close to their highest since October 2018. [O/R]
With prices rising mainly since October 2020, some energy companies plan to increase spending after cutting spending on drilling and completion for the past two years, although most still focus on capital discipline and returns. investors, rather than expanding supply.
“We maintain the view that many shale producers will find the current high prices too hard to ignore and, therefore, the reported (government) increase in total US production … could easily be followed by additional incremental gains, ”said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
U.S. crude production last week rose to 11.2 million barrels per day (bpd), its highest level since May 2020, according to US Energy Information Administration (EIA) data on Wednesday. [EIA/S]
U.S. shale oil production generally responds quickly to price signals, and the EIA this week forecast that production from seven major shale formations would increase by 38,000 b / d in July to around 7.8 million b / d. j.
However, OPEC officials have heard from industry experts that growth in U.S. oil production is likely to remain limited in 2021 despite rising prices, OPEC sources told Reuters.
“The general feeling about the shale was that it would come back as prices rose but not very quickly,” said a source from one of the companies who provided the forecast to OPEC.
In fact, many analysts do not expect this additional spending to increase production at all. Instead, they think it will only replace the natural declines in production from the wells.
Reporting by Scott DiSavino; Editing by Marguerita Choy